SALES PLANNING IMPORTANCE OF PLANNING Planning is a basic function of managers.

gers. Creates essential framework for all other decision making activities. Planning the future should be based on accurate forecasts. Every aspect of organizational work revolves around sales planning. Planning helps overcome the uncertainties in the dynamic environment.

ADVANTAGES OF PLANNING When the whole sales organization gets involved and participates as a team, the morals of its members can be improved. The efforts of the organization are focused towards its goals and directed accordingly to achieve them. The efforts of the sales force can be coordinated. The individual and collective standards, which help to evaluate the performance, may be developed which helps in identifying deviations and take corrective action. Planning often results in economies of operations because time can be taken to evaluate the alternatives and the most effective alternative can be identified for implementation. Careful planning is likely to reduce the potential for crisis and mistakes. Indirect benefits of sales planning may be as follows: Proper inventory levels can be maintained. Production process may be smooth and underutilization or over utilization of plant and machinery is avoided. Procurements of raw material based on sales forecasts and planning can be made at the right time. Customers can be served at the right time. Costs can be minimized. Profits can be maximized.

LEVELS OF PLANNING

PLANNING AT DIFFERENT LEVELS OF MANAGEMENT Type Strategic Planning Tactical planning Monthly and weekly planning Daily planning Participants CEO, Board of Directors, presidents, vice presidents General sales manager, other General managers. Regional sales managers Sales supervisors and sales representatives Focus Company mission, goals and objectives, primary strategies. Departmental, yearly, quarterly plans, policies, procedures, budgets. Branch plans and budgets Unit plans and budgets

SALES PLANNING PROCESS ANALYZING THE SITUATION Evaluation of market potential. Identification of market characteristics Market share analysis. Sales analysis. Study of competitive products. Sales, cost and profitability-by product, by market, by territory and by time period Understanding distribution channels of the competitors. Studying the promotional mix of the organization and the competitors. Understanding pricing, packaging, product quality of the competitors.

ESTABLISHING GOALS AND OBJECTIVES

GOALS AND OBJECTIVES OF A SALES ORGANIZATION Goals Implementation of SMIS over next five years Expansion of market area by penetrating into all the primary metropolitan areas over the next ten years Reduce sales turn over by the end of the decade Objectives Increase sales by 20% per year. Reduce customer complaints and grievances by 10%. Reduce sales force turnover by 5% Increase 1000 new outlets per year.

FORECASTING SALES Involves prediction of future sales for a prescribed period of time as an integral part of a marketing plan. Is based on set of assumptions and the environment. It is difficult to accurately predict the future. To have alternative set of sales and budget figures based on different assumptions. SELECTING STRATEGIES This is the next step in sales planning to search for and examine alternative courses of action to determine the best way to achieve the targets. The following figure depicts four types of growth strategies Sales organizations consider market penetration to gain more market share (market volume) with its current products in the current markets. It considers whether it can find new market for its current products. It considers whether its current markets are offered new products. Finally diversification strategy, new products in the new markets.

 Strategy business unit and the business portfolio matrix are the two major concepts relating to growth. Strategic business units (SBUs) are logical divisions of major businesses within multi-product companies. In evaluating the performance of SBUs, the most popular approach is the business portfolio matrix, developed by Boston Consulting Group It allows a companys various businesses to be plotted in one of four quadrants labeled cash cows, stars, dogs, or Problem children. Business in the problem children quadrant with a weak market share and a high growth rate usually requires cash injection to become stars. If problem children cannot be converted to stars, then they should probably be dropped. The cash cows with a high market share and a low growth rate, are usually in the position of making products at low cost. Therefore the products of these businesses provide cash needed to rejuvenate the problem children. The dogs are businesses with low market share and low market growth. These businesses are normally not profitable and generally should be disposed off.

DEVELOPING DETAILED ACTIVITIES Developing detailed activities are almost invariably required to support the implementation of the strategic plan. Salespeoples individual tactical plans must be compatible with the overall strategy of the sales department and company. ALLOCATING NECESSARY RESOSURCES Once detailed activity plans are developed, resources like money, materials, men, machines and time must be allocated to carry out the plans. Allocation of resources or budgets is the formal expression of managerial support. If done well, budget becomes the means of adding together the various plans and also set important standards against which planning progress can be measured.

IMPLEMENTING THE PLAN It is important to develop clear and meaningful strategies. It is also important to implement them effectively. Dividing the tasks to be accomplished in a time sequence format ensures timely implementation of a plan. Sales managers should closely implement the plan. Should remain alert to the unexpected changes in the environment. CONTROLLING THE PLAN Sales managers need a built-in monitoring device that will aid them in controlling the plans operations. The basic control process involves three steps: Establishing standards. Measuring performance against these standards. Correcting variation from standards and plans

CORRECTIVE ACTIONS Standards should reflect the various positions in an organizations structure. If performance is measured accordingly, it is easier to correct deviations. Performance monitored by concerned decision-oriented managers on a continuous basis ensures effective utilization of resources. ============================================================ ============================================================